TAX CHANGE COULD SNARE UNWARY VESSEL OWNERS

摘要

In December 2014, the UK Government took the drastic step of introducing a new tax, publishing draft legislation introducing a new diverted profits tax (DPT). The DPT is designed to counter aggressive tax avoidance by multinational enterprises such as Google, but it is widely drafted and could potentially apply to many UK companies that have entered into transactions with overseas connected parties, including companies in the offshore sector. The rules came into effect from 1 April 2015 and apply to arrangements already in place. They are complex, so it is only possible to give an overview of them in this article. Even if no DPT is payable, notification requirements may still apply. Where profits have been 'diverted' away from the UK, a 25 per cent tax rate will apply (or 55 per cent for companies in the oil and gas regime), which is 5 per cent higher than the normal corporation tax rate of 20 per cent.